ITO, Pune V. M/s Kumar Beharay Rathi, Pune

ITA 2346/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84950 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 2346 / P N/ 20 1 2 ASSESSMENT YEAR : 200 9 - 10 INCOME TAX OFFICER, WARD - 4(5), PUN E P.M.T. BUILDING, SWARGATE, PUNE VS. KUMAR BEHARAY RATHI, 2 ND FLOOR, KUMAR CAPITAL, 2413, EAST STREET, CAMP, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAAFK6677K APPELLANT BY: SHRI A.K. MODI RESPONDENT BY: SHRI NIKHIL PATHAK DATE OF HEARING : 26 - 08 - 2014 DATE OF PRONOUNCEMENT : 28 - 08 - 2014 ORDER PER R.S . PADVEKAR , JM : - IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMPUGNED ORDERS OF THE LD. CIT(A) - II, PUNE DATED 31 - 07 - 2012 FOR THE A.Y . 2009 - 10. THE REVENUE HAS TAKEN THE FOLLOW ING GROUNDS IN THE APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN ALLOWING ASSESSEE'S CLAIM OF DEDUCTION OF RS.6,12,61,422/ - U/S.80IB(10) OF THE I.T. ACT, 1961. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN HOLDING THAT THE P ROJECT 'KUBERA SANKUL' WAS AN INDEPENDENT PROJECT AND NOT AN EXTENDED PART OF THE PROJECT 'KUBERA VIHAR' COMMENCED IN 1992. 3. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE BENEFIT OF DEDUCTION U/S 80 IB(10) CANNOT BE EXT ENDED TO A HOUSING PROJECT CONCEIVED, PLANNED, DEVELOPED AND APPROVED BEFORE 01.10.1998 WHEREAS THE IMPUGNED PROJECT HAD BEEN CONCEIVED PRIOR TO 01.10.1998 AND ALSO NO DEVELOPMENT TOOK 2 ITA NO . 2346/PN/2012, KUMAR BEHARAY RATHI, PUNE PLACE IN CONNECTION WITH THE APPROVAL GIVEN BY THE PMC VIDE CERTIFICATE NO. 1486 DT. 23.01.2004. 4. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN FAILING TO APPRECIATE THAT AS WOULD BE EVIDENT FROM THE PLAN DT. 30.03.2007, THE IMPUGNED PROJECT WAS A MIXED PROJECT AND NOT A HOUSING PROJECT. 5. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) GROSSLY ERRED IN HOLDING THAT THE SO - CALLED 'KUBERA SANKUL PHASE - II' CONSISTING OF FOUR BUILDINGS WAS A DIFFERENT PROJECT THAN 'KUBERA SANKUL PHASE - I' IGNORING THE FACT THAT AS PER THE APPROVAL DT. 23.01.2004, THE ENTIRE 'KUBERA S ANKUL' HAD 11 BUILDINGS WHICH SHOULD HAVE BEEN COMPLETED BY 31.03.2008. 6. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE PROJECT CONSISTED OF COMMERCIAL AREA EXCEEDING 2000 SQ.FT. AND, THEREFORE, DID NOT SATISFY THE CONDI TION LAID DOWN IN SECTION 80IB(10)(D) OF THE ACT FOR ALLOWANCE OF CLAIM U/S.80IB(10). 2. THE FACTS WHICH ARE REVEALED F ROM THE RECORD AS UNDER. THE ASSESSE E FIRM IS ENGAGED IN THE BUSINESS OF AS A BUILDERS AND DEVELOPERS. IN THE A.Y. 2009 - 10 , THE ASSESS EE CLAIMED THE DEDUCTION U/S. 80IB(10) TO THE EXTENT OF RS.6,12,61,422/ - WHICH WAS IN RESPECT OF THE HOUSING PROJECT KUBERA SANKUL PRAOJECT. THE PROJECT KUBERA SANKUL CONSISTS OF THREE PHASES, PHASE I AND PHASE II WHICH WERE COMPLETED PROJECT AND PHA SE III WAS ONGOING PROJECT. IN PHASE I & II THERE WERE HAVING 8 BUILDINGS VIZ. ASHOK, BAKUL, CHAMPA, DEODHAR, GULMOHAR, KANCHAN, NILGIRI AND PARIJAT. THE SAID PROJECT WAS COMPLETED AND THE INCOME WAS DECLARED IN A.Y S . 2006 - 07 AND 2007 - 08. IN THOSE YEARS ALSO THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB(10) WAS DENIED. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER DENYING THE DEDUCTION AND THE LD. CIT(A) ALLOWED THE DEDUCTION TO THE ASSESSEE IN THE A.YS. 2006 - 07 AND 2007 - 08. THE REVENUE CARRIED THE MATTER BEFORE THE TRIBUNAL BUT WITHOUT SUCCESSES AS THE APPEALS FILED BY THE REVENUE WERE DISMISSED. A.Y. 2009 - 10 IS THE CONTINUING YEAR OF THE SAME HOUSING PROJECT. WE HAVE HEARD THE PARTIES. 3 ITA NO . 2346/PN/2012, KUMAR BEHARAY RATHI, PUNE 3. THE LD. COUNSEL SUBMITS THAT THE A.Y. 2006 - 07 WAS THE FIRST ASSESSMENT YEAR IN WHICH THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IB(10). HE SUBMITS THAT THE A.Y. 2009 - 10 WHICH IS A PRESENT ASSESSMENT YEAR THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IB(10) IN RESPECT OF THE SAME HOUSING PROJEC T I.E. KUBERA SANKUL AND NOW THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE LD. COUNSEL FILED THE COPY OF THE TRIBUNAL ORDER IN ITA NO. 639/PN/2011 AND ITA NO. 373/PN/2012 ORDER DATED 26 - 05 - 2014. THE LD. DR WAS FAIR UP TO SUBMITS THAT AT LEA ST AT THE TRIBUNAL LEVEL THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. WE FIND THAT IN THE A.YS. 2006 - 07 AND 2007 - 08 THE REVENUE HAS CARRIED THE ISSUE BEFORE THE TRIBUNAL BY CHALLENGING THE ORDER S OF THE LD. CIT(A) IN ITA NO. 639/PN/2011 AND ITA NO. 373 /PN/2012. THE TRIBUNAL CONFIRMED THE ORDER OF THE LD. CIT(A) ALLOWING THE DEDUCTION TO THE ASSESSEE. THE OPERATIVE PART OF THE ORDER OF THE TRIBUNAL IS AS UNDER: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LD. CO UNSEL SUBMITS THAT THE FIRST PROJECT OF THE ASSESSEE IS KUBERA VIHAR . THE ASSESSEE ACQUIRED THE LAND IN S. NO. 224/226A AT HADAPSAR, PUNE ADMEASURING 34,900 SQ. MTRS. ON 10 - 11 - 1987. THE ASSESSEE STARTED THE HOUSING PROJECT UNDER THE NAME KUBERA VIHAR CONSISTING OF BUILDINGS A2, A3, B1 AND B2 VIDE CC NO. 1620 DATED 03 - 04 - 1992 AND SAME WAS COMPLETED VIDE CC NO. 562 DATED 11 - 07 - 2003. THE ASSESSEE STARTED THE ANOTHER HOUSING PROJECT KUBERA SANKUL , PUNE PHASE - I WHICH WAS COMMENCED ON 24 - 07 - 2004 VIDE CC NO. 1486 WHICH CONSISTED OF FOUR BUILDINGS I.E. A (ASHOK), B (BAKUL), C (CHAMPA) AND A - 1 (DEVDHAR). IT ALSO S HOWN IN ITS LAY OUT BUILDING C - 1 AND IN THE LAY OUT PLAN THE ASSESSEE S HOWN THE BUILDINGS OF THE KUBERA VIHAR HAS BEEN COMPLETED. IN THE KUBE RA SANKUL, PHASE - I THE FOUR BUILDINGS I.E. A, B, C AND A - 1 WERE COMPLETED ON 09 - 09 - 2005 VIDE CC NO. 2981. THE ASSESSEE GOT APPRO V AL OF KUBERA SANKUL, PHASE - II VIDE CC NO. 4024 DATED 27 - 01 - 2005 WHICH CONSISTED OF FOUR BUILDINGS I.E. D (GULMOHAR), D 1 (KA NCHAN), D - 2 (NILGIRI) AND D - 3 (PARIJAT) AND THOSE BUILDINGS WERE ALSO COMPLETED ON 28 - 04 - 2008 VIDE CC NO. 1916. HE ARGUES THAT KUBERA SANKUL IS AN 4 ITA NO . 2346/PN/2012, KUMAR BEHARAY RATHI, PUNE INDEPENDENT PROJECT AND THE SAME WAS UNDERTAKEN AFTER 01 - 10 - 1998 I.E. THE JANUARY, 2004 AND THE ASSESSING OFFICER MISINTERPRETED THE LAY OUT PLAN EVEN IF IN THE SAID LAY OUT PLAN THE BUILDINGS OF KUBERA VIHAR HA VE BEEN SHOWN AS COMPLETED. HE SUBMITS THAT THERE WERE TWO SEPARATE PHASE OF THE KUBERA SANKUL AND BOTH THE PHASES INDEPENDENTLY QUALIFY FOR DEDUC TION U/S. 80IB(10) OF THE ACT. HE SUBMITS THAT WHERE THE BUILDINGS PLAN WERE APPROVED BEFORE 01 - 04 - 2004 , THE DATE OF COMPLETION AS PER SEC. 80IB(10) WAS 31 - 03 - 2008 BUT IN THE CASE OF KUBERA SANKUL THE BUILDING PLANS WERE FIRST MENTIONED ON 23 - 01 - 2004 VI DE CC NO. 1486 AND THOSE PROJECTS WERE COMPLETED ON 28 - 02 - 2008. HE SUBMITS THAT IN THE LAY OUT PLAN S O ME OTHER BUILDINGS I.E. C - 1(CHINAR), D - 1 (SHIRISH) AND C - 2 (CHANDAN) WERE SHOWN AS PARKING WHICH IS ALSO MISINTERPRETED BY THE ASSESSING OFFICER . T HE CC FOR THOSE BUILDINGS WERE OBTAINED ON 30 - 03 - 2007 VIDE CC NO. 4792 AND THOSE THREE BUILDINGS DO NOT FORM PART OF THE KUBERA SANKUL . HE SUBMITS THAT THE ASSESSING OFFICER HAS NOT APPRECIATED THE CORRECT FACTS EVEN IF ALL THE DOCUMENTS WERE PLACED BEFORE H IM. 8. PER CONTRA, THE LD. DR SUBMITS THAT ADMITTEDLY THE ASSESSEE STARTED THE HOUSING PROJECT MUCH PRIOR TO 01 - 10 - 1998 AS PER EVIDENCE ON RECORD THAT IN THE YEAR 1992 . I N THE LAY OUT PLAN IS IN RESPECT OF THE SAME LAND THEN HOW IT CAN BE CLAIMED THAT T HERE ARE SEPARATE AND DISTINCT HOUSING PROJECT S. HE RE FER S TO SEC. 80IB(10) AND ADVANCE D HIS ARGUMENT BY STATING THAT EVEN IF THERE IS A MULTIPLE SANCTIONED , THEN THE DATE OF LAST SANCTIONED WILL RELATE BACK TO THE DATE ON WHICH THE FIRST APPROVAL WAS GIV EN TO THE PLAN. IN SUM AND SUBSTANCE , HE SUPPORTED THE APPROACH OF THE ASSESSING OFFICER TREATING ONLY ONE HOUSING PROJECT OF THE ASSESSEE WHICH ACCORDING TO THE ASSESSING OFFICER THE PROJECT WAS ORIGINALLY COMMENCED PRIOR TO 01 - 10 - 1998. 9. THE ASSESSEE F ILED THE LAY OUT PLAN BEFORE US AS WELL AS THE COPY OF THE COMMENCEMENT CERTIFICATES AND COMPLETION CERTIFICATES. IN THE PRESENT CASE THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IB(10) IN RESPECT OF PROFIT DERIVED FROM THE PROJECT KUBERA SANKUL WHICH WAS SUBSEQUENTLY DESIGNATED KUBERA SANKUL, PHASE - I WHICH CONSISTED OF THE FOUR BUILDINGS A, B, C AND A - 1 . T HE FACTS ARE NOT IN DISPUTE AS THE BUILDING PLAN FOR THOSE FOUR BUILDINGS WAS APPROVED VIDE CC NO. 1486 DATED 23 - 01 - 2004. THE RESERVATION OF THE ASSESSING OFFICER IS THAT KUBERA SANKUL IS A PART AND 5 ITA NO . 2346/PN/2012, KUMAR BEHARAY RATHI, PUNE EXTENSION OF THE ASSESSEE S PROJECT I.E. KUBERA VIHAR WHI C H ALSO COMPRISES OF THE FOUR BUILDINGS AND HAD COMMENCED IN THE YEAR 1992. EVEN IT IS NOT DISPUTED BEFORE US BY THE REVENUE THAT THE KUBE RA SANKUL, PHASE - I THE PLAN FOR FOUR BUILDINGS WAS SANCTIONED IN JANUARY, 2004. THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION U/S. 80IB(10) IN RESPECT OF KUBERA VIHAR . AS PER BUILDING PLAN APPROVED DATED 25 - 06 - 2002 , THERE ARE FOUR BUILDINGS AS A - 2, A - 3, B - 2 AS EXISTING AND B - 1 AS PROPOSED. THE FINAL CC IN RESPECT OF KUBERA VIHAR IS IN RESPECT OF THE BUILDING B - 1 WHICH WAS RECEIVED ON 11 - 07 - 2003. THE ASSESSEE GOT THE BUILDING PLAN APPROVAL IN RESPECT OF THE KUBERA SANKUL ON 23 - 01 - 2004 AS EXPLAINED BY THE LD. COUNSEL AFTER THE ORDER OF AMALGAMATION OF THE PL OT DATED 22 - 01 - 2004. 10. IT IS ALSO SEEN THAT ON THE LAY OUT PLAN BUILDING A - 2, A - 1 AND B - 2 ARE SHOWN AS AN EXISTING BUILDINGS MORE PARTICULARLY PLAN WHICH IS APPROVED ON 23 - 01 - 2004. ON PERUSAL O F THE LAYOUT PLAN TO OUR UNDERSTANDING BOTH THE PROJECTS ARE INDEPENDENT AND SEPARATE AS WH EN KUBERA VIHAR WAS SANCTIONED AT THAT TIME KUBERA SANKUL WAS NOT CONCEIVED AT ALL. THE DEFINITION OF THE HOUSING PROJECT IS NOT GIVEN IN SEC. 80IB(10). IN THE CASE OF VANDANA PROPERTY (SUPRA) HON'BLE HIGH COURT OF BOMBAY HAS HELD THAT EVEN THE HOUSING PROJECT CAN BE COMPRISE D OF THE SINGLE BUILDING ALSO AND IT IS NOT NECESSARY THAT FOR CLAIMING THE DEDUCTION U/S. 80IB(10) THE ASSESSEE SHOULD START THE HOUSING P ROJECT ON PLOT OF LAND WHICH THERE IS NO OTHER BUILDING. ON THE ADMITTED FACT THAT THE HOUSING PLAN FOR THE KUBERA SANKUL PROJECT, PHASE - I AND PHASE - II WERE APPROVED FOR THE FIRST TIME ON 23 - 01 - 2004 AND 27 - 01 - 2005 RESPECTIVELY WHICH ARE SUPPORTED BY TH E DOCUMENTARY EVIDENCE LIKE SANCTIONS AND CC. S O IN OUR HUMBLE OPINION BOTH PROJECTS I.E. KUBERA VIHAR AND KUBERA SANKUL ARE INDEPENDENT PROJECTS. AFTER GIVING OUR ANXIOUS CONSIDERATION TO THE EVIDENCE PLACED BEFORE US AS WELL AS THE FACTS RECORDED B Y THE LD. CIT(A) , WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT KUBERA SANKUL IS AN INDEPENDENT HOUSING PROJECT AND IT CANNOT BE TREATED AS AN EXTENSION OF THE KUBERA VIHAR WHICH WAS COMMENCED IN THE YEAR 1992. THE GROUNDS TAKEN BY T HE REVENUE ARE CONFINED ONLY TO THOSE REASONING AND NO SPECIFIC GROUND IS TAKEN ON THE ISSUE OF THE VIOLATION OF CONDITION OF THE COMMERCIAL AREA BY THE REVENUE. WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY, TH E SAME ARE CONFIRMED IN BOTH THE YEARS. 6 ITA NO . 2346/PN/2012, KUMAR BEHARAY RATHI, PUNE 4. AS THE FACTS ARE IDENTICAL AS IN THE A.YS. 2006 - 07 AND 2007 - 08 WE, THEREFORE, FOLLOWING THE DECISION OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE CITED SUPRA CONFIRMED THE ORDER OF THE LD. CIT(A) AND GROUNDS TAKE N BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 28 - 0 8 - 201 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 28 TH AUGUST, 20 1 4 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - II, PUNE 4 THE CIT - II, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE